By TraderVox.com
Tradervox.com (Dublin) – The sterling pound has advanced to its highest level in four months against the dollar after a report in the UK signaled economic growth in the Kingdom as trade deficit contracted in July. This is the fourth time the UK currency has advanced against the dollar in the last five days. The advance is supported by sentiments that the unemployment has remained at its lowest since a year ago, a report is expected to show tomorrow. In addition, comments by policy makers in the UK that the economy is stronger than the data showed dampened speculations of expanding stimulus.
According to Jeremy Stretch, a London-based Forex Strategist at the Canadian Imperial Bank of Commerce indicated that the figures from the UK are encouraging and has fundamental implications to economic growth. He predicted that the sterling pound may strengthen more against the dollar and the euro. The figures indicate that the economy may be coming out of a double-dip recession which had worsened due to debt crisis in the euro region. Ian McCafferty, who is a Bank of England Monetaru Policy Committee member, suggested that the data is signaling some momentum in the economy in a statement he gave to lawmakers yesterday. George Osborne, the Chancellor of the Exchequer, indicated in his speech in the House of Commons yesterday said that the government will publish its Autumn Statement on December 5.
The pound is facing resistance at $1.6081 according Axel Rudolph who is a technical analyst in London at Commerzbank. The strength of the pound is seen in its performance last month, when it increased by 0.6 percent. It increased by 0.5 percent against the dollar yesterday in London to exchange at $1.6067, after it advanced to 1.6079, its strongest level since May 15. The pound fell against the euro by 0.2 percent to trade at 79.97 pence per euro.
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